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How to Avoid Credit Card Debt: Insight from an Indianapolis Bankruptcy Attorney


Credit card debt can grow until it becomes nearly impossible to pay the monthly payments.  The monthly payments on credit cards can be devastating to your budget.  Beyond this “monthly” aspect, how can these cards ever be repaid?   Being an Indianapolis bankruptcy attorney, I have seen countless people from the greater Indianapolis area file for bankruptcy at our office over the years due to the excessive build up of credit card debt.  What can be done to avoid Credit Card Debt?   Let’s talk about three “safe guards” that can help you avoid excessive credit card debt.

The Scheduled Pay-Off Time

The best way to avoid credit card debts is to do something that credit card companies hate: have a scheduled pay-off time.   If you are paying off your credit card debts on a regular, scheduled basis, you will be at much less of a risk of accumulating high credit card debts.  You need to schedule a certain time whether that is every month, every two months, or every three months where you will pay-off the entirely of your credit card debt.   You can even “auto-schedule” payoffs with most credit cards from their website’s auto-pay function.   If you have an established pay-off time, you will not overspend or carry over large balances.

Reduce Your Expenses as Much as Possible

Credit cards (or any other form of credit) can very quickly get people into the dynamic of spending the entirety of their income on their expenses.   Even worse, many people end up spending more than their income on their various activities and expenses.  Credit cards open up a very limited period of time where you can spend more than you make!

It is absolutely critical that you budget your expenses to be much less than your income.   Attempt to spend 50-80% of your free income on your planned expenses.  This leaves money to save, money to give toward other people, and it frees you from the need of turning to credit cards when your budget does not add up.

No Cards or Low-limits

The safest and most “sure” way to avoid credit card debt is to have no cards at all.  The excuses that most people bring to get into massive credit card debt are usually false and contrived.  They range from “we need credit cards for emergencies” to “we need credit cards to rent a car.”   These flimsy and false excuses are really just a smoke-screen usually for being unwilling to move away from a debt-oriented lifestyle.  Having no credit cards is definitely a step in the right direction on avoiding credit abuse.

Using cards with low balances – such as $500 to $1000 – can also be a powerful safeguard.   If you have one or two cards with these low balances, you can usually plan to pay them off at scheduled times as discussed above.  You will still have credit cards for “convenience,” but the cycle of carrying an outstanding large debt will be more easily broken.